Sales grew by 44% YoY
This company provides the SEARCH ENGINE
Here is an EASY thread on a HARD TO UNDERSTAND business
$ESTC Elasticsearch is an open source analytics and full-text search engine
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔍" title="Nach links zeigende Lupe" aria-label="Emoji: Nach links zeigende Lupe">
It was released in 2010 & authored by Shay Banon
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👤" title="Silhouette einer Büste" aria-label="Emoji: Silhouette einer Büste"> (Current CEO)
Elastic NV was incorporated in 2012 to provide commercial services
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> and products around the software
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> It went public in 2018
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen">
It was released in 2010 & authored by Shay Banon
Elastic NV was incorporated in 2012 to provide commercial services
But what is a SEARCH ENGINE
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔍" title="Nach links zeigende Lupe" aria-label="Emoji: Nach links zeigende Lupe">
Let’s say you are building your #ecommerce website
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> You add products to it, host it and bring it live
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> Users will start going through your products
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👀" title="Augen" aria-label="Emoji: Augen"> Of course, some users will want to look for something specific
Let’s say you are building your #ecommerce website
Doesn’t sound TOO difficult right
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🤯" title="Explodierender Kopf" aria-label="Emoji: Explodierender Kopf"> Indeed, this can be seen as the internal “Google” of websites
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> Do companies develop this feature from the ground up? Or do they rely on a third party?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👨💻" title="Man technologist" aria-label="Emoji: Man technologist">
But…
https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen"> A search engine is something basic right
https://abs.twimg.com/emoji/v2/... draggable="false" alt="❇️" title="Glanz" aria-label="Emoji: Glanz"> You just type in some keywords and get back the ones that match
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="‼️" title="Doppeltes Ausrufezeichen" aria-label="Emoji: Doppeltes Ausrufezeichen"> Well, there is more to a search engine than keyword-matching
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
$ESTC provides one of the best search engines available, when you type and search, it does the following
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Auto-completion, correcting typos, fuzzy matching, synonyms matching
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📝" title="Memo" aria-label="Emoji: Memo">
Is it important to provide a solid search engine
https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen"> Look at HappyFresh’s story
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> HappyFresh is a leading grocery shopping
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛍" title="Einkaufstaschen" aria-label="Emoji: Einkaufstaschen"> and delivery platform in South East Asia
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🌏" title="Asien-Australien auf dem Globus" aria-label="Emoji: Asien-Australien auf dem Globus">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="2️⃣" title="Tastenkappe Ziffer 2" aria-label="Emoji: Tastenkappe Ziffer 2"> Customers were not completing orders
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛒" title="Shopping cart" aria-label="Emoji: Shopping cart"> as the search results were taking too long to appear
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🤯" title="Explodierender Kopf" aria-label="Emoji: Explodierender Kopf">
Not convinced yet? Here are $ESTC customer stories
https://www.elastic.co/customers/ ">https://www.elastic.co/customers...
Is that all? $ESTC is a powerful search engine and that’s it?
On top of searching through full-text data
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📄" title="Seite mit der Schriftseite oben" aria-label="Emoji: Seite mit der Schriftseite oben"> $ESTC enables you to search structured data such as numbers and aggregate data
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🧮" title="Abacus" aria-label="Emoji: Abacus">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> $ESTC can then be used as an analytics platform
On top of searching through full-text data
And it doesn’t stop here
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚦" title="Vertikale Verkehrsampel" aria-label="Emoji: Vertikale Verkehrsampel"> $ESTC is a good at analysing full-text data
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> What could it be used for as well?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> Application Performance Management (APM) by aggregating the logs (information on warnings, errors, events recorded by an application)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🗒" title="Spiralblock" aria-label="Emoji: Spiralblock"> from different applications
Ok
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> By now what $ESTC does should be clear
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💡" title="Elektrische Glühbirne" aria-label="Emoji: Elektrische Glühbirne">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Given their lead in full-text analysis
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> Their product has many use cases and helps companies deliver better search results, monitor events and improve security
https://abs.twimg.com/emoji/v2/... draggable="false" alt="⁉️" title="Ausrufe-Fragezeichen" aria-label="Emoji: Ausrufe-Fragezeichen"> Why can $ESTC win in this market? How is the market evolving?
Let’s first take a look at how $ESTC is doing on http://db-engines.com"> http://db-engines.com
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> $ESTC search engine leads
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> the pack with a popularity score of 153 vs. 89 for next-BEST (Apache Solr)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
Remember when we were saying that $ESTC is an internal Google
They have become the de facto standard - or “Google” - for enterprise search
How is the market evolving?
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="1️⃣" title="Tastenkappe Ziffer 1" aria-label="Emoji: Tastenkappe Ziffer 1"> According to 360 ResearchReports
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="💻" title="Computer" aria-label="Emoji: Computer"> Enterprise Search market is set to grow from $ 3.2B in 2019 to $ 9B by 2026 (CAGR of 13%)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="➡️" title="Pfeil nach rechts" aria-label="Emoji: Pfeil nach rechts"> Proliferation of data and increased requirements from users drive the demand for enterprise search
So $ESTC is a leader in Search
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔍" title="Nach links zeigende Lupe" aria-label="Emoji: Nach links zeigende Lupe"> and also offers IT Operations Monitoring
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📟" title="Pager" aria-label="Emoji: Pager"> and Security tools
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛡" title="Schild" aria-label="Emoji: Schild">
What can be said about these? Here is what Forbes has to say
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
What can be said about these? Here is what Forbes has to say
“Elastic’s APM product has matured enough that it’s only missing some minor features. The company sees the observability market trending toward a convergence of logging, metrics, uptime monitoring and APM...
...Elastic’s go-to-market message emphasizes that the company provides all four of those offerings across a unified pricing model and user interface”
And on Security
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛡" title="Schild" aria-label="Emoji: Schild"> $ESTC is securing its own part of the pie in Security Information and Event Management (SIEM)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten">
“Elastic CEO Shay Banon thinks the endpoint and SIEM markets can converge over time. With Endgame added to the Elastic Stack,...
“Elastic CEO Shay Banon thinks the endpoint and SIEM markets can converge over time. With Endgame added to the Elastic Stack,...
...users will gain access to a whole new level of security analytics to help provide better attack protection”
Read the full take here
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> #1dfae440784a">https://www.forbes.com/sites/robertdefrancesco/2019/09/29/elastics-core-search-technology-powers-multiple-growth-levers/ #1dfae440784a">https://www.forbes.com/sites/rob...
Summarized
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👉" title="Rückhand Zeigefinger nach rechts" aria-label="Emoji: Rückhand Zeigefinger nach rechts"> The CEO Shay Banon
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👤" title="Silhouette einer Büste" aria-label="Emoji: Silhouette einer Büste"> is betting on the fact that enterprises want a unified offering for Search
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔍" title="Nach links zeigende Lupe" aria-label="Emoji: Nach links zeigende Lupe"> IT Operations Monitoring
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📟" title="Pager" aria-label="Emoji: Pager"> and Security Information and Event Management
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🛡" title="Schild" aria-label="Emoji: Schild">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🚀" title="Rakete" aria-label="Emoji: Rakete"> This is working and further supported by $ESTC impressive 130% Net Expansion Rate
...of our single agent, and now, literally, endpoint protection is a click away for all of our observability users”
Financials check
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> Sales at $ 129m up from $ 89m a year earlier (44% growth)
https://abs.twimg.com/emoji/v2/... draggable="false" alt="⚙️" title="Zahnrad" aria-label="Emoji: Zahnrad"> Gross margins of 73%
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📈" title="Tabelle mit Aufwärtstrend" aria-label="Emoji: Tabelle mit Aufwärtstrend"> Up from 71% in previous quarters
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🏢" title="Bürogebäude" aria-label="Emoji: Bürogebäude"> Operating loss of $ 29m
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📉" title="Tabelle mit Abwärtstrend" aria-label="Emoji: Tabelle mit Abwärtstrend"> OpEx as % of Sales at 96% down from 100% a quarter earlier
Disclaimer - This is not investment advice in any form and investors are responsible for conducting their own research before investing.
Sources
✑ Investor presentation
✑ Company website
✑ DBEngines
✑ Forbes
Sources
✑ Investor presentation
✑ Company website
✑ DBEngines
✑ Forbes
✑ Nexthink
✑ StackShare
✑ MarketsAndMarkets
✑ 360 ResearchReports
✑ StackShare
✑ MarketsAndMarkets
✑ 360 ResearchReports
Hope you liked this thread!
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> For more content, follow us on Twitter
https://abs.twimg.com/emoji/v2/... draggable="false" alt="🔥" title="Feuer" aria-label="Emoji: Feuer">
https://abs.twimg.com/emoji/v2/... draggable="false" alt="✅" title="Fettes weißes Häkchen" aria-label="Emoji: Fettes weißes Häkchen"> Want to get UNDER HYPED companies delivered straight to your inbox
https://abs.twimg.com/emoji/v2/... draggable="false" alt="📩" title="Umschlag mit nach unten zeigendem Pfeil darüber" aria-label="Emoji: Umschlag mit nach unten zeigendem Pfeil darüber"> Don’t MISS IT
https://abs.twimg.com/emoji/v2/... draggable="false" alt="👇" title="Rückhand Zeigefinger nach unten" aria-label="Emoji: Rückhand Zeigefinger nach unten"> https://getbenchmark.substack.com"> https://getbenchmark.substack.com